Understanding Government

Last week I blogged that Illinois Gov. Pat Quinn, a Democrat, decided to spend $47 million to extend Put Illinois to Work, which originally started as a federal stimulus bill jobs program but is now being paid for entirely by the state. Civics 101 students may have wondered how the governor can decide to spend money without the state legislature’s approval. The Chicago Tribune’s Monique Garcia reports that the GOP leader in the Illinois Senate, Christine Radogno, is wondering the same thing — Radogno sent a letter to Quinn Friday questioning both the effectiveness of Put Illinois to Work and whether Quinn could legally extend the program.

The conflict centers around two of the biggest problems in Illinois — high unemployment and a state government that has avoided confronting a historic $15 billion or so budget deficit. (more…)

Just days after signing the latest budget in state history, its becoming increasingly clear that California’s $19 billion budget hole wasn’t filled, but merely papered over.

First, the budget depends on over $5 billion in federal aid that has yet to be committed. Another $1.2 billion will emerge from a dubious real estate deal that sells off more than a dozen state-owned office buildings to private investors at the bottom of the commercial real estate cycle and rent the space back. The state’s Legislative Analysts Office says this scheme won’t generate a dime over the long haul and will end up costing taxpayers $1.5 billion more than would holding on to the buildings. (more…)

If the economy needs another round of stimulus programs, as Paul Krugman and other economists have suggested, then renewing the federally funded Put Illinois to Work and similar state programs are a good place to start. (more…)

In all the state’s major newspapers and blogs today is the story that state unemployment dipped from 11.7 percent in April to 10.8 percent May. But the good news is fleeting — Illinois unemployment fell because temporary employees were hired to conduct the ten-year census, not because new permanent jobs were created. (more…)

The Wall Street Journal’s Phil Izzo reports on a couple of disquieting recession-related statistics: First, a quarter of the 8.4 million jobs lost in the recession are never, ever coming back — these jobs have been permanently outsourced, automated or simply disappeared. Second, the U.S. labor market is expected to add only 133,000 jobs a month — that barely covers 100,000 monthly new entrants into the labor force. Which means the unemployment rate is projected to decrease to 9.4 percent by December — only .3 percent better then what it is now.

Faced with such sweeping and complex macroeconomic questions there is only one responsible thing for a political journalist to do: see if we can blame Barack Obama. Well, Obama can only address unemployment as much as the Senate wants him to. And the jobs bill unveiled by Harry Reid yesterday is a modest measure built around a payroll tax holiday for employers as well as other hiring incentives. Perhaps Obama should use his bully pulpit to argue for more direct job creation. But it seems that neither the president nor Senate has the appetite to do with the labor market what the Federal Reserve did with Wall Street: radical government intervention.